GameStop Jumps Another 6% As Retail Investors Push Harder Against Short Sellers

• GameStop gained as much as 6% at the start of Friday as retail investors racked up more cash in high-end stocks.
• Citron Research partner Andrew Left pointed out five reasons why the stock fell to $ 20 on Thursday, but his video only encouraged online traders to increase their bets.
• Purchases by casual investors more than doubled GameStop shares this month. Still, technical indicators suggest the rally is running out of steam.
• Watch the GameStop trade live here.

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GameStop jumped 6% at the start of Friday, as investors looking to thwart short sellers piled further into the action.

The video game retailer’s shares more than doubled in January after changes to the company’s board of directors sparked an explosive rally. The rally intensified as short sellers abandoned their bearish positions and a growing crowd of retail traders applauded the action on the upside.

The shorts-and-bull fight entered a new phase on Wednesday after Citron Research Managing Partner Andrew Left posted a video highlighting five reasons he expects GameStop’s actions drop to $ 20. Left had initially planned to stream to explain his short stance, but attempts to hack his Twitter account forced him to record the video.

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The managing partner criticized GameStop’s high valuation and reliance on physical locations in this nearly 7-minute video. Left also called on traders to double their stock, urging them to “know who is on the other side of the trade” and respect their experience in the market.

“This is a bankrupt mall based retailer,” he added. “The number of people who are so passionate about making GameStop higher, and not because of fundamentals, just shows the natural state of the market.”

The members of the WallStreetBets subdirectory are unfazed. The forum – known for its crude market-based humor and celebration of triple-digit portfolio swings – remains largely bullish on the stock and features several articles berating the left for its bearish stance. Commentators urge each other to maintain “diamond hands” and hold onto their GameStop actions indefinitely. Others are calling on retail traders to join them and increase the stock even more.

While it remains to be seen who wins in the end, there are some indicators to suggest that the Bull Festival is coming to an end. The GameStop stock relative strength index – a measure of the stock’s momentum – sits just below 80 after Thursday’s 10% rise. Readings above 70 suggest the stock is overbought and the index has not landed below the threshold since January 12.

GameStop closed at $ 43.03 on Thursday, up about 123% year-to-date. The company has two “buy” ratings, two “maintain” ratings and one “sell” rating from analysts.

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